The Dearness Relief (DR) hike announced for central government retirees under the 7th Pay Commission has been clarified by the Department of Pension & Pensioners’ Welfare (DoPPW). This states that DR is payable on the initial basic pension received by former central government employees prior to commutation.
“References/Representations have been received in this Department seeking clarification whether the Dearness Relief is payable on original basic pension or on pension as reduced after commutation. It is clarified that dearness relief is payable on the original basic pension before commutation or such basic pension before commutation as revised on implementation of recommendations of Pay Commission etc. and not on the pension as reduced after deduction of commuted pension,” said DoPPW.
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To offset the price increase, retired central government personnel and beneficiaries of family pensions are allocated DR benefits under Rule 52 of the CCS (Pension) Rules, 2021. Even individuals receiving a compassionate allowance under Rule 41 are eligible for the benefit. The central government announced it simultaneously with the Dearness Allowance, and it is payable every six months (DA).
As per the 7th Pay Commission, the current DR rate for central government pensioners is 38 percent.
DR is the same as a dearness allowance (DA) but is given to central government pensioners.
The pay drawn in accordance with the applicable Level in the Pay Matrix as stipulated by the 7th Pay Commission recommendations implemented by the government is referred to under the new structure as “Basic Pay” for the purposes of calculating DA. Any other emoluments, such as special pay, are not included in basic salary.
For Central Government employees: Dearness Allowance percent = ((Average of AICPI (Base Year 2001=100) for the past 12 months -115.76)/115.76) *100
All India Consumer Price Index is referred to as AICPI.
Employers in the public sector (central government) use the following formula:
Dearness Allowance percentage is calculated as follows: ((Average of AICPI (Base Year 2016=100) for the last three months -126.33)/126.33)*100.
